Performance Briefing Fiscal Year March, 2016 TDK Corporation April 28, 2016 Copyright© 2016 TDK Corporation. All rights reserved. -1- ◆Consolidated Results for FY March 2016 Tetsuji Yamanishi, Corporate Officer ◆Consolidated Full Year Projections for FY March 2017 and Mid-Term Policy Takehiro Kamigama, President and CEO Copyright© 2016 TDK Corporation. All rights reserved. -2- Consolidated Results for FY March 2016 Tetsuji Yamanishi Corporate Officer Copyright© 2016 TDK Corporation. All rights reserved. -3- Highlights of the Operating Results for FY March 2016 ◆Net sales achieved a new record at 1,152.3 billion yen. Record net sales in the Passive Components and Film Application Products segments. Magnetic Application Products segment recorded a much sharper decline in net sales than initially expected, due to a significant drop in HDD demand. ◆Operating income increased 29% year on year to 93.4 billion yen. Passive Components and Film Application Products achieved new record highs, absorbing the downturn in HDD heads. The Company conducted restructuring in HDD heads in 4Q to prepare for a further slump in HDD demand. ◆Executing growth investment in line with Medium-Term Management Plan. Expanding from ICT to the automotive and industrial businesses. Conducted various M&As to accelerate growth. Formed business alliance and established joint venture with Qualcomm. Aggressively invested in strategic growth product expansion. Copyright© 2016 TDK Corporation. All rights reserved. -4- Consolidated Full Year Results for FY March 2016 (Yen billions） Net sales Operating income FY March 2015 Full Year Results FY March 2016 Full Year Results Change Yen billions % 1,082.6 1,152.3 69.7 6.4 72.5 93.4 20.9 28.8 8.1% 6.7% Operating income margin - Ex-rate Income before Income Taxes 74.5 91.8 17.3 23.2 Net income 49.4 64.8 15.4 31.2 Earning per share (JPY) 392.78 514.23 US$ (JPY) 109.84 138.88 120.13 132.67 EURO (JPY) Ex-rate impact to Net sales & Operating income Copyright© 2016 TDK Corporation. All rights reserved. - - Depreciated by 9.4% Appreciated by 4.5% Net sales：Increased by about 85.3 billion Yen Operating income：Increased by about 17.3 billion Yen -5- FY March 2016 Results - Passive Components Segment Net Sales (Yen billions) 532.0 575.7 466.1 14/3 ●Ceramic Capacitors ・Both sales and profits increased year on year, particularly due to increased sales for automobile market. 15/3 16/3 Operating Income 66.4 11.5% 36.6 16.1 14/3 Net Sales 575.7 billion yen (up 8.2% year on year) Operating Income 66.4 billion yen (up 81.4% year on year) 6.9% 15/3 14/3: FY March 2014 16/3 ●Inductive Devices ・Both sales and profits increased year on year, particularly due to increased sales for automobile market. ●High-frequency Components ・Both sales and profits increased year on year due to strong sales for the ICT market. ・Profit margins also improved significantly due to increased productivity and improved product mix. ●Piezoelectric Material Products ・Both sales and profits increased year on year due to increased sales of OISs for camera modules. Copyright© 2016 TDK Corporation. All rights reserved. -6- FY March 2016 Results - Magnetic Application Segment Net sales 315.3 billion yen (down 13.2% year on year) Operating income 13.2 billion yen (down 55.6% year on year) Net Sales (Yen billions) 357.0 363.3 315.3 ●Recording Devices ・HDD head shipment volume declined significantly due to contraction of the HDD market (PC demand slowdown and acceleration of switch to SSDs in PCs). Significant decline in sales and profit year on year. 14/3 15/3 16/3 Operating Income 30.2 automotive (xEV*) and industrial machinery markets due to the decline in oil prices and the economic slowdown in China. 29.7 8.2% 13.2 4.2% 14/3 15/3 ●Magnets ・ Sales for the HDD market declined, and also declined for the 16/3 14/3: FY March 2014 Copyright© 2016 TDK Corporation. All rights reserved. ●Power Supplies ・ Sales to the industrial equipment market of products such as semiconductor manufacturing equipment and measuring equipment remained strong. *xEV : EV, HEV, PHEV -7- FY March 2016 Results - Film Application Segment Net Sales 222.4 (Yen billions) Net sales 222.4 billion yen (up 47.0% year on year) Operating income 36.4 billion yen (up 48.0% year on year) 151.3 129.3 ●Energy Devices (Rechargeable Batteries) 14/3 15/3 16/3 Operating Income 24.6 13.4 36.4 ・ Sales and profits increased significantly year on year. ・ Increased share among major customers and expanded customer portfolio. ・ Expanded applications beyond smartphones to include drones, etc. 16.4% 16.2% 14/3 15/3 16/3 14/3: FY March 2014 Copyright© 2016 TDK Corporation. All rights reserved. -8- FY March 2016 results by Segment FY March 2015 Full Year Results Yen billion FY March 2016 Full Year Results Yen billion ％ Change Yen billion ％ % Capacitors 149.0 13.8 150.4 13.1 1.4 0.9 Inductive devices 147.3 13.6 149.2 12.9 1.9 1.3 Other Passive Components 235.8 21.8 276.1 24.0 40.3 17.1 532.0 49.1 575.7 50.0 43.7 8.2 Recording devices 260.5 24.1 219.8 19.1 (40.7) -15.6 Other Magnetic Application Products 102.8 9.5 95.5 8.3 (7.3) -7.1 Magnetic Application Products 363.3 33.6 315.3 27.4 (48.0) -13.2 Film Application Products 151.3 14.0 222.4 19.3 71.1 47.0 Other 35.9 3.3 38.8 3.4 2.9 8.1 Total 1,082.6 100.0 1,152.3 100.0 69.7 6.4 Passive Components 36.6 6.9 66.4 11.5 29.8 81.4 Magnetic Application Products 29.7 8.2 13.2 4.2 (16.5) -55.6 Film Application Products 24.6 16.2 36.4 16.4 11.8 48.0 Other 0.6 1.6 1.9 4.8 1.3 - 91.4 8.4 117.8 10.2 26.4 28.9 Passive Components Net Sales Operating Income Sub total Corporate and eliminations Total Copyright© 2016 TDK Corporation. All rights reserved. (18.9) 72.5 6.7 (24.4) 93.4 8.1 (5.5) 20.9 28.8 -9- Breakdown of Operating Income Changes FY March 2015 72.5 billion yen (Yen billions) Changes in sales +39.3 Operating Income Sales price Reduction -66.8 +20.9 billion yen Rationalization, cost reduction +38.5 Benefits from Restructuring +2.3 FY March 2016 93.4 billion yen SG&A expenses increase -9.7 93.4 72.5 Exchange fluctuation (US$=Yen 120.13) +17.3 Copyright© 2016 TDK Corporation. All rights reserved. - 10 - FY March 2016 Quarterly Results by Segment (Yen billions) 4Q of FY March 2015 (A) 3Q of FY March 2016 (B) 4Q of FY March 2016 (C) YoY Change (C)-(A) Yen billions QoQ Change (C)-(B) % Yen billions % Net Sales Capacitors 37.6 36.4 35.4 (2.2) -5.9 (1.0) -2.7 Inductive Devices 36.4 37.4 35.4 (1.0) -2.7 (2.0) -5.3 Other Passive Components 62.8 67.7 65.5 2.7 4.3 (2.2) -3.2 136.9 141.5 136.3 (0.6) -0.4 (5.2) -3.7 62.6 25.9 58.5 23.3 46.0 22.9 (16.6) -26.5 (12.5) -21.4 88.5 44.1 10.3 279.9 81.8 68.5 10.0 301.7 68.9 46.6 11.1 262.9 (19.6) 8.0 17.5 16.5 8.5 106.3 (1.0) -5.7 6.3 9.4 0.6 24.3 (5.0) 4.7 14.6 (0.1) 36.7 (6.4) 0.2 5.4 1.4 23.5 (6.0) (6.1) -96.8 (4.5) -95.7 (4.0) -42.6 (9.2) -63.0 0.8 133.3 1.5 19.4 30.3 17.5 6.9% 10.0% 6.7% -0.2pt Passive Components Recording Devices Other Magnetic Application Products Magnetic Application Products Film Application Products Other Total Passive Components Operating Income Magnetic Application Products Film Application Products Other Sub total Corporate and Eliminations Total Operating Income margin Ex- US$(JPY) rate EURO(JPY) Copyright© 2016 TDK Corporation. All rights reserved. 119.21 134.74 121.41 133.05 (3.0) (0.4) -1.7 -22.1 (12.9) -15.8 2.5 5.7 (21.9) -32.0 0.8 7.8 (17.0) (0.8) -11.6 1.1 -6.1 (38.8) -3.3 (13.2) (1.0) - (1.9) - (12.8) - 0.4 -3.3pt 11.0 -12.9 -36.0 -42.2 - 115.46 127.37 - 11 - Consolidated Full Year Projections for FY March 2017 and Mid-Term Policy Takehiro Kamigama President and CEO Copyright© 2016 TDK Corporation. All rights reserved. - 12 - Consolidated Full Year Projections for FY March 2017 Copyright© 2016 TDK Corporation. All rights reserved. - 13 - FY March 2017 Full Year / Dividend Projections (Yen billions） Net sales FY March 2016 Full Year Results 7.7 0.7% 93.4 74.0 (19.4) -20.8% 8.1% 6.4% -1.6 pt - 91.8 73.0 (18.8) -20.5% 64.8 50.0 (14.8) -22.8% 514.23 396.00 - - - - Income before income taxes 1st half : 60 2nd half : 60 Annual: 120 1st half : 60 2nd half : 60 Annual : 120 US$(JPY) 120.13 110.00 - EURO(JPY) 132.67 125.00 - Dividends (JPY) Ex-rate % Yen billions 1,160.0 Operating income margin Earning per share (JPY) YoY Change 1,152.3 Operating income Net income FY March 2017 Full Year Projections 160.7 200.0 39.3 24.5% Depreciation and amortization 83.2 95.0 11.8 14.2% Research and development 84.9 90.0 5.1 6.0% Capital expenditure Copyright© 2016 TDK Corporation. All rights reserved. - 14 - Projections for FY March 2017 -Image of changes in sales (Yen billions) Segment FY March 2016 Full Year Results FY March 2017 Full Year Projections (YoY Change) Passive Components 575.7 +3～+6% Magnetic Application Products 315.3 -11～-14% Film Application Products 2,22.4 +12～+15% Other 38.8 1,152.3 1,160.0 Total Forex assumptions US$(JPY) EURO(JPY) Copyright© 2016 TDK Corporation. All rights reserved. 120.13 132.67 110.00 125.00 - 15 - Points of FY March 2017 Segment Outlook for Priority Businesses ・Inductors: Share expansion of thin-film and multi-layered products in the ICT and automotive markets Passive Components ・High-frequency Components: Sales expansion for small, high-performance, discrete components and modules ・Piezoelectric Material Products: Expansion of the OIS business (increased usage rate among smartphones in China) ・HDD heads: Magnetic Application Products Contraction in HDD market volume with decline in PC demand and acceleration in switch to SSDs Approx. 444 million units in FY March 2016 ⇒ Approx. 400 million units (10% decrease) in FY March 2017 ・Sensors: Expansion in sensors for automotive market and contribution from Micronas Film Application Products (Rechargeable Batteries) ・Rechargeable batteries: Continued expansion in demand for polymer batteries as a result of thinner profile mobile devices Expansion in new application demand ・Continuation of investment for production expansion and rationalization in line with demand Copyright© 2016 TDK Corporation. All rights reserved. - 16 - Mid-Term Policy Copyright© 2016 TDK Corporation. All rights reserved. - 17 - Priority Markets, Priority Businesses and New Businesses Automobile Priority Five Businesses ・Inductive Devices ・High-frequency Components ・Piezoelectric Material Product ・HDD Heads ・Rechargeable Batteries ICT New Businesses Thin-film components Wearable Healthcare Sensors for automobile and industrial equipment Energy units for automobile and industrial equipment Strategic Growth Products Sensors and Actuators Energy unit Next-generation electronic components Industrial equipment /Energy Performance briefing for FY March 2015 (held in April in 2015) Copyright© 2016 TDK Corporation. All rights reserved. - 18 - Regarding the Recording Devices Business (HDD Heads) ◆HDD market / HDD head demand trend (FY March 2016 – FY March 2020) Mil HDD HDD Demand F/C by Application Mil Head 500 2,000 400 1,500 Head Demand F/C by Application 300 1,000 200 500 100 0 0 2016/3 2017/3 2018/3 2019/3 2020/3 Server/Data Center PC External PVR Game Surveillance Others 2016/3: FY March 2016 ・HDD market contraction trend to continue (444 million units in FY March 2016 ➝ 363 million units in FY March 2020 ・Contraction of PC market and accelerated switch to SSDs in PCs ・High-end HDDs for high-speed processing also increasingly switched to SSDs ・Steady HDD demand for near-line, external, and surveillance camera applications to continue Copyright© 2016 TDK Corporation. All rights reserved. 2016/3 Server/Data Center 2017/3 2018/3 2019/3 2020/3 PC External PVR Game Surveillance Others ・Despite contraction of the HDD market, HDD head demand to remain level ・Demand for HDDs in PCs to continue contracting ・The number of heads per HDD to continue increasing, mainly in near-line HDD heads (FY March 2016: 3.43 heads ➝ FY March 2020: 4.22 heads) (TDK’s estimation) - 19 - Regarding the Recording Devices Business (HDD Heads) Rightsizing Internal Operations and Contributing to Rightsizing of the Industry (1) Internal right-sizing - Front-end processing plants: Consolidated two plants → one plant - Back-end processing plants: Restructure China operations and start production of passive components in the Philippines (2) Contribute to industry right-sizing - Non-captive：Strengthen vertical collaboration in development and manufacturing that transcends conventional frameworks - Captive ：Horizontal labor division to avoid overlapping investment and cost increases Support development of advanced technologies that contribute to Time-To-Market (3) Provide products and services through advanced technology capabilities - Realize thermal assist head (TAMR: front- and back-end processes), two-dimension MR (TDMR), micro dual stage actuator (DSA) - Provide services leveraging back-end processing capability Continue to be “an entity that is relied upon by market” even in a contracting market Copyright© 2016 TDK Corporation. All rights reserved. - 20 - TDK Growth Strategy (Strategic Growth Products for the IoT Market) Accelerate expansion of strategic growth products by strengthening of the business collaboration with Qualcomm →To land business opportunities in the IoT business through priority markets. Internet of Things (IoT) Priority Markets Automobiles ICT Industrial equipment/ Energy Strategic Growth Products 1.Sensors Actuators 2.Energy Magnetic sensors Temperature sensors Pressure sensors Other sensors DC/DC converters Batteries On-board chargers Wireless charging Units 3. Next-generation electronic components Thin-film products Compound-components SESUB Strengthened Business Collaboration with Qualcomm Copyright© 2016 TDK Corporation. All rights reserved. - 21 - Sensors / Actuators Non-optical sensor market : US$6.8 billion in 2014 ⇒ US$10.6 billion in 2019 Market forecast 9.1% annual growth Mil US$ 12,000 Global non-optical sensor market (by type) 10,000 Other 8,000 Pressure 6,000 Magnetic 4,000 Temperature 2,000 Inertia 0 2013 2014 2015E 2016E 2017E 2018E 2019E (TDK’s estimation) Copyright© 2016 TDK Corporation. All rights reserved. - 22 - Sensors / Actuators Expansion strategy of magnetic sensor business Expand module sensor system business ・Merge sensor assembly technologies ・Expand local business utilizing Chinese production bases Maximize synergies with Micronas ・ Hall and TMR-hybrid sensors for automotive market ・ ASIC/ASSP technology development in TDK products Expand business through initiatives to capture demand for consumer applications ・ Expand demand with high precision, energy saving characteristics Expand automotive TMR sensor business ・ Complete development of core product lineup (FY March 2017) ・ Expand application and customer base Copyright© 2016 TDK Corporation. All rights reserved. - 23 - Sensors / Actuators Expand Sensors and Actuators businesses (Sales) 200.0 (Yen billions) Expansion of Actuators business Business creation by proprietary technologies + new technology utilization To develop high accuracy and low power consumption products 0.0 2016/3 2017/3 2018/3 Sensors 2019/3 2021/3 Actuators 2016/3: FY March 2016 Copyright© 2016 TDK Corporation. All rights reserved. - 24 - Energy units “From single products to systems” Provide units that combine hardware and software with power transforming functions, energy storage functions, energy control functions Power Conversion Function ・AC-DC & DC-DC convertors ・Invertors ・Chargers ・Two-way AD-DC and DC-DC converters (for regenerative energy applications) ・Wireless charging system Electricity Storage Function ・Industrial lithium-ion batteries ・Automotive lithium-ion batteries ・Energy Storage System (ESS) lithium-ion batteries ・Electric Double Layer Capacitors (EDLCs) Energy Management System Function ・Battery Management Units (BMUs) ・Battery Management Systems (BMSs) ・Various sensors (Current sensors, Temperature sensors, etc.) Copyright© 2016 TDK Corporation. All rights reserved. - 25 - Energy units AGV(Auto Guided Vehicle) Hand of Robot Copyright© 2016 TDK Corporation. All rights reserved. Mobile Robot Pendant for CNC - 26 - Energy units WPT System - Overview & Functions Grid Battery Comm. Comm. Grid Charger Rectifier Amp AC Plug-in Rx-Coil Tx-Coil Ground Assembly Amplifier Grid PFC Vehicle Assembly Tx-Coil Rx-Coil Coil & Cap. INV. IMN Coil & Cap. Control Comm. (Wi-Fi) FOD Rectifier IMN Rectifier Comm. (Wi-Fi) Control Charger Battery IMN: Impedance Matching Network, FOD: Foreign Object Detection Copyright© 2016 TDK Corporation. All rights reserved. - 27 - Energy units Expand Energy units business (Sales) 100.0 (Yen billions) 0.0 2016/3 2016/3: FY March 2016 2017/3 Copyright© 2016 TDK Corporation. All rights reserved. 2018/3 2019/3 2021/3 - 28 - Next-generation electronic components Combine SESUB technology, thin-film technology, and materials technology to provide high value-added products that meet customers’ diversifying needs going forward SESUB technology Thin‐film technology Material technology Copyright© 2016 TDK Corporation. All rights reserved. Next‐generation electronic components ・SESUB ・Compound products ・Thin-film high frequency filters ・Thin-film capacitors (sheet, discrete) ・MEMS ・Low profile inductors, etc. - 29 - Next-generation electronic components Expand product lineup by introducing advanced technologies Develop further thinner SESUB packages with embedded passive components Full-scale expansion of SESUB business making maximum use of joint venture with Advanced Semiconductor Engineering Co., Ltd. Copyright© 2016 TDK Corporation. All rights reserved. - 30 - Next-generation electronic components Transfer of Renesas Semiconductor Manufacturing’s Tsuruoka factory Background ・Establishment of thin-film passive components production base in Akita district ・Securing of the manufacturing and technical capabilities for thin-film product ・Securing of production space for future demand expansion of thin-film product Tsuruoka Factory Bldg.3 Bldg.1 Bldg.2 ※ Renesas Semiconductor Manufacturing Co., Ltd. Copyright© 2016 TDK Corporation. All rights reserved. - 31 - Next-generation electronic components Expand Next-generation electronic components business (Sales) 200.0 (Yen billions) 0.0 2016/3 2017/3 2018/3 2019/3 2021/3 2016/3: FY March 2016 Copyright© 2016 TDK Corporation. All rights reserved. - 32 - Consolidated sales projections 2,000.0 (Yen billions) Expect sales and profits growth in the medium- and long-term by expanding strategic growth products 0.0 2016/3 2017/3 Organic 2018/3 2019/3 2021/3 Strategic Growth Products 2016/3: FY March 2016 Copyright© 2016 TDK Corporation. All rights reserved. - 33 - Consolidated operating income projections 250.0 (Yen billions) 0.0 2016/3 2017/3 2016/3: FY March 2016 Copyright© 2016 TDK Corporation. All rights reserved. Organic 2018/3 2019/3 2021/3 Strategic Growth Products - 34 - Management Target in Mid-Term Growth Investment • Investment in new products, new businesses, and M&A • Increase production capacity of existing businesses Return to Shareholders • Stabilize or increase dividends through EPS growth • Target a 30% dividend payout ratio FY March 2015 Results FY March 2018 Target Operating Income Margin 6.7% Over 10% ROE 7.2% Over 10% Copyright© 2016 TDK Corporation. All rights reserved. TDK Corporation April 28, 2016 - 35 - Growth Investment Capital Expenditure ¾ Accelerate expansion of strategic growth products ¾ Accelerate expansion of existing priority businesses R&D Investment ¾ Strengthen overseas R&D bases ¾ Accelerate “Monozukuri” innovation Total investment over the Medium-Term Plan (FY March 2016 – FY March 2018) 350～400 billion yen 430～480 billion yen About 230 billion yen About 250 billion yen Medium-Term Management Plan (Original) Latest forecast Copyright© 2016 TDK Corporation. All rights reserved. TDK Corporation April 28, 2016 - 36 - Supplementary Data Copyright© 2016 TDK Corporation. All rights reserved. - 37 - Financial Position (Yen billions) Change 2015-2016 March end, 2014 March end, 2015 March end, 2016 1,239.6 587.3 635.3 (87.1) 51.3% 1,404.3 646.3 738.9 (5.9) 52.6% 1,450.6 766.0 675.4 (102.3) 46.6% 46.3 119.7 (63.5) (96.4) -6.0% Cash and cash equivalents, Short-term investments 259.5 286.5 307.5 21.0 Interest-bearing Debt 267.0 (7.5) 268.3 18.2 335.8 (28.3) 67.5 (46.5) Total Assets Total Liabilities Stockholder’s equity (comprehensive income) Stockholder’s equity ratio Net Cash Cash and cash equivalents, Short-term investment 300 259.5 267.0 286.5 Interest-bearing Debt Net Cash 307.5 335.8 268.3 200 100 18.2 0 March end, 2014 -100 (7.5) Copyright© 2016 TDK Corporation. All rights reserved. March end, 2015 March end, 2016 (28.3) - 38 - Free Cash Flow Operating cash flow 150 100 Incestment cash flow Free cash flow 151.6 142.9 127.3 71.9 50 15.6 11.0 0 March end, 2014 March end, 2015 March end, 2016 -50 (55.4) -100 (127.3) -150 (Yen billions) FY March 2014 FY March 2015 (140.6) FY March 2016 Change 2015-2016 Capital Expenditures 68.6 102.5 160.7 58.2 Depression and amortization 83.1 80.2 83.2 3.0 Copyright© 2016 TDK Corporation. All rights reserved. - 39 - Quarterly sales and operating income by segment FY March 2015 Yen billions FY March 2016 Net Sales Capacitors 1Q 36.5 2Q 37.3 3Q 37.5 4Q 37.6 Inductive Devices 35.7 37.1 38.1 36.4 Other Passive Components 49.7 55.5 67.6 62.8 121.9 129.9 143.2 136.9 Recording Devices 59.1 63.7 75.1 62.6 Other Magnetic Application Products 26.2 25.5 25.3 25.9 Magnetic Application Products 85.2 89.2 100.4 88.5 Film Application Products 22.5 37.2 47.4 44.1 7.8 8.5 9.4 10.3 237.5 264.8 300.4 279.9 Passive Components 7.8 9.4 11.4 8.0 Magnetic Application Products 7.3 8.5 7.7 6.3 Film Application Products 0.3 5.2 9.6 9.4 (0.5) 0.2 0.2 0.6 14.8 23.3 29.0 24.3 Corporate and Eliminations (5.2) (4.9) (3.8) (5.0) Total 9.6 Passive Components Other Total Operating Income Other Sub total 18.3 25.2 19.4 Total 149.0 147.3 235.8 532.0 260.5 102.8 363.3 151.3 35.9 1,082.6 36.6 29.7 24.6 0.6 91.4 (19.0) 72.5 1Q 39.1 2Q 39.5 3Q 36.4 4Q 35.4 37.9 38.6 37.4 35.4 70.8 72.1 67.7 65.5 147.8 150.2 141.5 136.3 54.6 60.7 58.5 46.0 24.8 24.6 23.3 22.9 79.4 85.3 81.8 68.9 43.2 64.1 68.5 46.6 9.2 8.6 10.0 11.1 279.6 308.1 301.7 262.9 15.0 17.4 17.5 16.5 3.8 4.5 4.7 0.2 4.7 11.6 14.6 5.4 0.4 0.2 (0.1) 1.4 23.9 33.7 36.7 23.5 (5.8) (6.3) (6.4) (6.0) 18.1 27.4 30.3 17.5 Total 150.4 149.2 276.1 575.7 219.8 95.5 315.3 222.4 38.8 1,152.3 66.4 13.2 36.4 1.9 117.8 (24.4) 93.4 Ex-rate US$(JPY) 102.17 103.86 114.25 119.21 109.84 121.29 122.31 121.41 115.46 120.13 EURO(JPY) 140.17 137.77 142.79 134.74 138.88 134.15 136.06 133.05 127.37 132.67 Copyright© 2016 TDK Corporation. All rights reserved. - 40 - FY March 2017 Projections and Forex sensitivity Expenses (Yen billions) Capital expenditure 250 Depreciation R&D 200.0 200 160.7 150 100 85.6 102.5 77.4 68.6 82.9 80.2 83.2 95.0 53.5 50 0 13/3 14/3 13/3: FY March 2016 15/3 16/3 17/3 Projections 13/3 14/3 15/3 16/3 17/3 13/3 63.4 14/3 Projections 70.6 15/3 84.9 16/3 90.0 17/3 Projections Forex Sensitivity (impact by 1 (one) yen change) ●US$ : Sales 5.0 billion yen, Operating Income 1.4 billion yen Copyright© 2016 TDK Corporation. All rights reserved. - 41 - Annual Sales by applications (FY March 2012 – FY March 2015) Annual Sales by applications (FY March 2013 – FY March 2016) FY15/3: FY March 2015 Copyright© 2016 TDK Corporation. All rights reserved. - 42 - Passive Components Business Annual sales by applications (FY March 2012 – FY March 2015) Passive Components Business Annual sales by applications (FY March 2013– FY March 2016) FY15/3: FY March 2015 Copyright© 2016 TDK Corporation. All rights reserved. - 43 - Quarterly sales by applications (1Q of FY March 2014 – 4Q of FY March 2015) Quarterly sales by applications (1Q of FY March 2015 –4Q of FY March 2016) Copyright© 2016 TDK Corporation. All rights reserved. - 44 - Passive Components Business quarterly sales by applications (1Q of FY March 2014 – 4Q of FY March 2015) Passive Components Business quarterly sales by applications (1Q of FY March 2015 –4Q of FY March 2016) Copyright© 2016 TDK Corporation. All rights reserved. - 45 - 2007/3: FY March 2007 Copyright© 2016 TDK Corporation. All rights reserved. - 46 - 2007/3: FY March 2007 Copyright© 2016 TDK Corporation. All rights reserved. - 47 - Cautionary Statements with Respect to Forward-Looking Statements This material contains forward-looking statements, including projections, plans, policies, management strategies, targets, schedules, understandings, and evaluations about TDK, or its group companies (TDK Group). These forward-looking statements are based on the current forecasts, estimates, assumptions, plans, beliefs, and evaluations of the TDK Group in light of the information currently available to it, and contain known and unknown risks, uncertainties, and other factors. The TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties, and other factors, the TDK Group’s actual results, performance, achievements, or financial position could be materially different from any future results, performance, achievements, or financial position expressed or implied by these forward-looking statements, and the TDK Group undertakes no obligation to publicly update or revise any forward-looking statements after the issue of this material except as provided for in laws and ordinances. The electronics markets in which the TDK Group operates are highly susceptible to rapid changes, risks, uncertainties, and other factors that can have significant effects on the TDK Group including, but not limited to, shifts in technology, fluctuations in demand, prices, interest and foreign exchange rates, and changes in economic environments, conditions of competition, laws and regulations. Also, since the purpose of these materials is only to give readers a general outline of business performance, many numerical values are shown in units of a billion yen. Because original values, which are managed in units of a million yen, are rounded off, the totals, differences, etc. shown in these materials may appear inaccurate. If detailed figures are necessary, please refer to our financial statements and supplementary materials. Copyright© 2016 TDK Corporation. All rights reserved. - 48 - Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2016/4q_1.htm Copyright© 2016 TDK Corporation. All rights reserved. - 49 -